Written by

Dan D’Ambrosio

Free Press Staff Writer

Benjy Adler, owner of the Chubby Muffin on Oak Street in Burlington, on Wednesday. Adler also owns the Skinny Pancake, which received an exemption from Burlington's livable wage law to operate the food concession at the Burlington International Airport. / GLENN RUSSELL/FREE PRESS

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Live by social responsibility, die by social responsibility?

The situation isn’t quite that stark for Benjy Adler, owner of the Skinny Pancake, in the wake of the firestorm kicked up by the restaurant’s exemption from Burlington’s livable wage ordinance at the city’s airport, where he will open several outlets — but it has been pretty rough.

“You can see it online for yourself, a number of people have pledged never to eat here again,” Adler said after the Burlington Free Press broke the story online Monday evening.

Here’s a typical tweet from Donna Iverson (with the run-on and the typo left intact): “#btv has been a city that stood for livable wages the Skinny Pancake exception is a signal that it not longer does #saddayforworkers #vt.”

Under the guidelines of the ordinance, first passed under a Progressive administration in 2001 and revised two years ago, contractors and vendors for the city are required to pay a livable wage; currently $13.94 per hour if they provide health insurance, or $17.71 per hour if they don’t.

Nonetheless, there was a provision in the ordinance for exemptions if it would cause the business “substantial economic hardship,” a case Adler successfully made to the city’s Board of Finance as he received unanimous approval.

But the question becomes this: If you base your business on a commitment to social responsibility — buying locally, getting involved in the community, donating to 1 Percent For The Planet — as Adler does, should you seek an exemption from a similarly socially responsible measure such as the livable wage in the first place?

And then there’s this question for the measure’s supporters: Is the livable wage a well-intentioned but practically flawed ordinance that raises far too many complications when applied in the real world?

John Ryan, director of the Vermont Agricultural Development Program for the Vermont Sustainable Jobs Fund, said he would think “long and hard” about the first question if he owned a business such as Adler’s. Ryan points out that Adler has built a customer base through his commitment to the community and sourcing local supplies of food for the Skinny Pancake and the Chubby Muffin. Adler said he spends about $400,000 in the local food economy every year.

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“It makes them stand out as a choice for folks who share those values,” Ryan said. “It’s really important for companies to have a standard set of values. It’s what their customers rely on. I just wonder whether it’s a good business decision to lose some of that benefit by seeking the exemption.”

No clear process

The law came into being out of concern that Burlington’s high rents and other costs of living can make life untenable for individuals in low-wage jobs. The intent was best summed up in comments made in November 2001, when the ordinance was passed. Heather Riemer, a United Electrical Workers representative, said this: “Our tax dollars ought not to support employers who don’t pay enough to survive.”

Around that same time, Progressive Mayor Peter Clavelle had this to say: “We want to avoid a situation where contractors can come in with a low bid on the backs of their employees.”

It should be stated that Burlington’s livable wage is different than, and higher than, the minimum wage. In Vermont, since the start of 2012, the minimum wage has been $8.46 per hour, and $4.36 an hour for service or tipped employees who routinely receive at least $120 per month in tips.

The minimum wage applies to all employers. The city’s livable wage, however, applies only to contractors and vendors doing business with the city.

And, as Adler points out and Democratic Mayor Miro Weinberger acknowledges, it doesn’t seem to have been applied consistently.

Emma Mulvaney-Stanak spent four years, from 2003 to 2007, as director of the Vermont Livable Wage Campaign at Burlington’s Peace and Justice Center. She currently is a labor organizer for the Vermont National Education Association.

Mulvaney-Stanak said she didn’t think the exemption for the Skinny Pancake, or an earlier exemption for TD Bank approved by the Kiss administration, were the “right moves.” But she acknowledged the ordinance has its weaknesses.

“The problem with the exemptions is there is no clear process to get them,” Mulvaney-Stanak said. “There is room for growth in the ordinance on how to really determine an exemption.”

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Adler made his case for an exemption in a two-page Oct. 11 letter to the Board of Finance. He said Skinny Pancake’s currently hourly wage for non-salaried employees, without health benefits, is $11.37 an hour. Adler compared that to a livable wage standard of $15.83 an hour (which is not actually the current livable wage, without benefits, of $17.71).

Asked about the discrepancy, Adler said he thought he got the $15.83 figure from a posting in City Hall. He said he was unaware of the $17.71 figure, which ironically, would have made his case stronger.

The bottom line of Adler’s letter, and presentation, is that he would lose money at the airport if he was required to pay a livable wage.

“We are currently projecting a 7.57% rate of profit annually at the airport if we maintain our margins,” Adler wrote. “Thus, with the LWO applied, we would project an annual loss of .18% of revenues there.”

That is the argument everyone accepted, says Weinberger, including the airport commission and staff and the Board of Finance, on which Weinberger serves.

“No one raised an objection to the hardship exemption at the time,” Weinberger said.

Adler’s letter also raised other concerns. If Skinny Pancake were to pay the livable wage, “due to our commitment to sourcing our food locally, we will find ourselves at the edge of the bell (curve) of affordable pricing even by airport standards.” Pricing food that high “would have a negative impact on the brand image of the Skinny Pancake, the Burlington International Airport and the local food movement in Vermont as a whole.”

In addition, there was this complication: Some Skinny Pancake employees are going to work both at existing locations and the new airport operation. “These employees would be faced with either maintaining a disparity between their wages in different locations, which would be a human resource disaster, or we would have to match their LW compensation wherever they work, which would be additional economic hardship to our business,” Adler wrote.

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Opaque records

Weinberger said exemptions to the livable wage ordinance have been “relatively rare.” He acknowledges, however, that the records surrounding the ordinance are “opaque,” which may help explain Adler’s confusion concerning the current livable wage.

“Those are the ones we know about,” Weinberger said of the two exemptions.

The livable wage ordinance applies only to the airport, according to Weinberger, and not to other city-owned properties with lease-holders, such as Splash at the Boathouse.

“It’s just the airport, it’s clearly in there, and frankly we’re still trying to understand what the past practice has been on this,” Weinberger said.

Even at the airport, Weinberger said, it doesn’t appear the livable wage ordinance was “uniformly applied” in the past.

“All of that is a long way of saying I don’t think there have been lots of procedures like this where someone has requested an exemption,” he said.

Even if the current confusion surrounding Burlington’s livable wage ordinance is cleared up, the bigger question will remain concerning which socially responsible practices a socially responsible business is expected to follow, and which it isn’t, without damaging its reputation with its customers.

“Of course, overall we love to see people paid well, but we need sustainable businesses to keep the jobs going, too,” said Andrea Cohen, executive director of Vermont Businesses for Social Responsibility.